Iceland's president talks up city's market status

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Iceland's biggest bank is to begin operations in Hong Kong next month as the city extends its financial bridge between the mainland and the outside world, the nation's president, Olafur Grimsson, said on a state visit last week.

Mr Grimsson said his visit to Hong Kong - after a whirlwind mission across the mainland, which included talks with President Hu Jintao - was to signal Iceland's respect for the city's market status.

Iceland has been hoping to develop closer links with the city's financial institutions, which Mr Grimsson said was a crucial pillar to rapidly expanding ties with the mainland.

He said Landsbanki, Iceland's national bank, already had operations across Europe and the US and was ranked among the world's top 100 banks. 'The banks in Iceland have grown quickly since they were privatised from small institutions to fast-growing global players,' he said.

Mr Grimsson said Iceland would be the first European nation to sign a free-trade agreement with the mainland.

A group of Icelandic companies has formed a joint venture with a mainland consortium to develop geothermal power in Xianyang, Shaanxi province.

Iceland leads the world in the generation of geothermal power, which harnesses the internal energy of the Earth.

'It's absolutely clear that Hong Kong will be the financial centre of Asia and the financial bridge between China and the rest of the world,' Mr Grimsson said.

'The power of the Chinese economic machine is now so strong that no matter what happens in Europe or the US, this enormous pace of growth will continue. It is absolutely essential to establish a presence in India and China, and Hong Kong is in the unique position of being the only major financial bridge between the rest of the world and China.

'I wanted to come to Hong Kong to state how we intend to perform and behave.'

Mr Grimsson said he had been impressed by how open Mr Tsang and the mainland leadership were to the opportunities offered by geothermal power.

A survey will be done of the Pearl River Delta to assess whether there is any potential in the area for developing such power.